Tuesday, November 29, 2011

Could the B&H 500 Happen?

Soon to be the BH 500?
Could we be looking at a future where Berkshire Hathaway ends up owning a large chunk of every major U.S. corporation of value?  With the billions that roll into his BH coffers quarterly, Warren Buffett can - and does - buy up good businesses on the cheap every time there's a market dip (and there's certainly no end in sight to those given the current economic landscape).  Could this continue until there aren't any good businesses left in the U.S. that Mr. Buffett doesn't own, just so-so ones?  Businesses that do measure up benefit from his "seal of approval" of course - and thereby tend to exhibit even better metrics - while their competitors sometimes get hit where it hurts, in their share price, just because they didn't "make the BH grade".  (That's okay, America needs lots of "#2's", trying harder to be #1, in my estimation.)  In fact, my question is a bit facetious, as you may have guessed.  That's because Berkshire Hathaway staff already constantly assess the companies in the S&P 500 and find many of them wanting.  His approximately 70 insurance, and 68 non-insurance companies as of 2010 have an increasingly international flavour, so the S&P 500 is safe - it will never mirror the B&H 500.  Which begs the question, will the MSCI World index eventually become become the B&H 1600?